Public Bank Berhad Announced The Proposed Acquisition Of 44.15% Equity Interest in LPI Group

 Dear Readers, 

Public Bank Berhad To Acquire A Controlling Stake in LPI Through A Strategic Union and the Teh Family Refines Their Equity Position In Public Bank Berhad 

Signing Ceremony Of Proposed Acquisition by Public Bank Berhad - Tan Sri Dato' Sri Dr. Tay Ah Lek (L) and Teh Li Shian Diona (R)

Public Bank Berhad ("Public Bank") today on 10 October 2024 has announced the proposed acquisition that has entered into a conditional sale and purchase agreement ("SPA") with the Estate of the Late Tan Sri Dato' Sri Dr. Teh Hong Piow ("Estate") and Consolidated Teh Holdings Sdn. Bhd ("ConTeh") on 10 October 2024. 

 

This proposed acquisition is in aggregate of 175, 896,000 ordinary shares in LPI Capital Bhd ("LPI") that represent an approximately 44.15% equity interest in LPI with a total cash consideration of RM 1.72 billion ("Proposed Acquisition"). 

 

For your information, LPI is a company listed on the Main Market of Bursa Malaysia that has been in operations for over 60 years and this company is mainly involved in the underwriting of general insurance with a total of 12 branches operating throughout Malaysia, 1 branch in Singapore and also operates in Cambodia through an associate company. 

Opening Remarks by Tan Sri Dato' Sri Dr. Tay Ah Lek, Managing Director and Chief Executive Officer of Public Bank Berhad

The Proposed Acquisition represents a strategic opportunity for Public Bank to further expand its general insurance segment into the Malaysian market through the LPI Group. said Tan Sri Dato' Sri Dr. Tay Ah Lek, Managing Director and Chief Executive Officer of Public Bank Berhad.

This acquisition will allow the enlarged Public Bank Group to establish an immediate market presence and strong foothold in the general insurance segment in Malaysia as a comprehensive complementary service to its current financial services and Family Takaful offerings. 

Not only that, the Proposed Acquisition is also in line with the Group's plans to expand beyond just organic growth but through strategic acquisitions to expand the product and service offerings. 

As an evident, Public Bank Berhad recently completed the acquisition of Public Bank Securities Vietnam Company Limited which allowed the Group to expand its financial services offering in Vietnam with the inclusion of securities trading services. 

This strategic acquisition of LPI Group, a long-established and leading general insurance player in Malaysia, represents a clear and unique opportunity for Public Bank Berhad to accelerate the vision to move towards a "Universal Banking Model" that offers a comprehensive and diverse range of financial and other related products and services under the same group. Tan Sri Dato' Sri Dr. Tay Ah Lek concluded.

Proposed Acquisition Signing Ceremony

With the existing network of over 260 branches located throughout the country, LPI Group would be able to leverage and expand its distribution channels and further grow its general insurance business in Malaysia. 

In addition, Public Bank Berhad would also be able to tap into the sales and distribution network of LPI and further expand the reach to cover clients and customers of LPI. 

Aside from the mutual cross selling of products and services, Public Bank and LPI will also explore possibilities on developing new integrated products and services catering to the customers' financial and insurance needs. 

As this is a related party transaction, the Proposed Acquisition is subject to the approval of the non-interested shareholders of Public Bank at an Extraordinary General Meeting ("EGM") to be held at a later date. 

Should the Proposed Acquisition be approved at the EGM, Public Bank will be obliged to extend an unconditional mandatory take-over offer ("MGO") ("Proposed Offer") for the remaining equity interest in LPI not already owned by it. 

It is pertinent to note that Public Bank has received the approval from the Ministry of Finance and Bank Negara Malaysia for the Proposed Acquisition and is expected to complete this corporate exercise in the 1st quarter of 2025. 

 

Barring any unforeseen circumstances, the Proposed Acquisition is expected to be value accretive and contribute positively to the future earnings of the Public Bank Group.  

Press Conference Session With (L-R: Ms. Chang Siew Yen, Senior Chief Operating Officer, Public Bank Berhad, Tan Sri Dato' Sri Dr. Tay Ah Lek, Managing Director and Chief Executive Officer, Public Bank, Ms. Teh Li Shian Diona, Youngest Daughter of late Tan Sri Dato' Sri Dr. Teh Hong Piow, Mr. Lee Yo-Hunn, Chief Executive Officer of Public Investment Bank)

The Estate and ConTeh intends to undertake a restricted offer for sale  ("ROFS") of a portion of their Public Bank Shares, progressively over a 5-year period and will be in compliance with the Financial Services Act. said Ms. Teh Li Shian Diona, the youngest daughter of late Tan Sri Dato' Sri Dr. Teh Hong Piow.

During the speech delivery by Ms. Teh Li Shian Diona, she highlighted that;

My father often said that the success of Public Bank was not his alone - it is built on the trust and loyalty of its shareholders and the relentless commitment of its employees, or as he would like to call them his "corporate family".

 

As to honour late Tan Sri Dato' Sri Dr. Teh Hong Piow legacy and to show deep appreciation and gratitude, they will be undertaking an exercise to distribute a portion of their Public Bank shares at a discount to all employees, directors, and eligible shareholders of the Public Bank Group. 

 

This initiative aims to ensure that Public Bank remains in the hands of those who have nurtured its growth and success over the years, enabling them to continue building the legacy together. 

 

 

Ms. Teh Li Shian Diona, Youngest Daughter of late Tan Sri Dato' Sri Dr. Teh Hong Piow Delivering Her Speech At Signing Ceremony Event

Although we will be streamlining our stake, I would like to take this opportunity to reiterate our firm and unwavering commitment to contribute as the major stakeholders of Public Bank. This is not just a role or title for us - it is an honour and a responsibility that we deeply cherish. We are devoted to upholding my father's legacy and continuing the stewardship of this esteemed institution. Ms. Teh Li Shian Diona added.

 

Ms. Teh Li Shian Diona concluded that they are deeply grateful to Bank Negara Malaysia and the Ministry of Finance for their trust by granting the approval to continue helming Public Bank. 

With their support, we will perform our utmost best to lead Public Bank with the same passion, integrity, and vision that has defined the PBB group thus far. Ms. Teh Li Shian Diona concluded.

 

It was indeed a great opportunity to witness this momentous occasion and I'm looking forward to more updates in the near future. 

 

Attended Public Bank Berhad Important Announcement Of The Proposed Acquisition

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